Student Loan Forgiveness: $51 Billion in Spending Over the Next Ten Years (S. 2432)

What is S. 2432?

(Updated June 23, 2020)

This bill would allow borrowers to refinance their student loans at lower interest rates while at the same time consolidating loans and allowing the borrower to make only one payment per month, and deal with only a single loan officer. 

Argument in favor

Simplifies the repayment process for borrowers. Helps women, as due to the gender pay gap, females have a more difficult time paying back student loans.

Argument opposed

A ten-year, $51 billion bailout for people who can't pay back their student loans is not something that taxpayers can or should have to shoulder at this juncture.

Impact

The bill affects students dealing with student loan payments.

Cost of S. 2432

The math here is a little complicated. The bill spends $51 billion over the next decade. However, the bill also plans to introduce a minimum tax of 30% for those making more than $1 million a year. That tax hike would in turn increase federal revenues by $72 billion over the next decade, leading to a deficit reduction of $22 billion over the same ten-year period.

Additional Info

Media:

Of Note:

The bill would allow students to refinance at the current rates of 3.86 percent for undergraduate loans and 5.41 percent for graduate loans. Refinancing of Parent Plus loans to the current 6.41 percent is also included in the bill. Currently, outstanding student loans carry interest rates as high as 9 percent.